Colombo To Buy Shares Back From Emirates

The

is looking to buy back its shares in the national carrier SriLankan Airlines from Emirates. Emirates bought its 43.6 percent equity stake in 1998 for $70 million dollars, and kept it when it ended its 10 year management contract with the Sri Lankan government in 2008. The value of Emirates share in the airline increased to $150 million by the end of the contract period.

Emirates made all management decisions under terms of the contract agreement, which included exclusive rights for ground handling and airline catering at Colombo-Bandaranaike airport. Near the end of the contract, the Sri Lankan government cancelled the work permit of the airline’s chief executive, Peter Hill, due to a dispute over seats for President Mahinda Rajapakse on a London-Colombo flight. Emirates supported the termination decision, but did not renew the contract because of the governments attempt to gain more control over SriLankan. Now, the government is operating the airline and wants a higher percentage of ownership.